Sentiment Analysis in Finance: From Transformers Back to eXplainable Lexicons (XLex)

Lexicon-based sentiment analysis (SA) in finance leverages specialized, manually annotated lexicons created by human experts to extract sentiment from financial texts. Although lexicon-based methods are simple to implement and fast to operate on textual data, they require considerable manual annotation efforts to create, maintain, and update the lexicons. These methods are also considered inferior to the deep learning-based approaches, such as transformer models, which have become dominant in various NLP tasks due to their remarkable performance. However, transformers require extensive data and computational resources for both training and testing. Additionally, they involve significant prediction times, making them unsuitable for real-time production environments or systems with limited processing capabilities. In this paper, we introduce a novel methodology named eXplainable Lexicons (XLex) that combines the advantages of both lexicon-based methods and transformer models. We propose an approach that utilizes transformers and SHapley Additive exPlanations (SHAP) for explainability to learn financial lexicons. Our study presents four main contributions. Firstly, we demonstrate that transformer-aided explainable lexicons can enhance the vocabulary coverage of the benchmark Loughran-McDonald (LM) lexicon, reducing the human involvement in annotating, maintaining, and updating the lexicons. Secondly, we show that the resulting lexicon outperforms the standard LM lexicon in SA of financial datasets. Thirdly, we illustrate that the lexicon-based approach is significantly more efficient in terms of model speed and size compared to transformers. Lastly, the XLex approach is inherently more interpretable than transformer models as lexicon models rely on predefined rules, allowing for better insights into the results of SA and making the XLex approach a viable tool for financial decision-making.

Company classification using zero-shot learning

In recent years, natural language processing (NLP) has become increasingly important in a variety of business applications, including sentiment analysis, text classification, and named entity recognition. In this paper, we propose an approach for company classification using NLP and zero-shot learning. Our method utilizes pre-trained transformer models to extract features from company descriptions, and then applies zero-shot learning to classify companies into relevant categories without the need for specific training data for each category. We evaluate our approach on publicly available datasets of textual descriptions of companies, and demonstrate that it can streamline the process of company classification, thereby reducing the time and resources required in traditional approaches such as the Global Industry Classification Standard (GICS). The results show that this method has potential for automation of company classification, making it a promising avenue for future research in this area.